Some farm subsidies appear on the way out

The subsidies in question are direct payments to farmers whether they grow a crop or not. The Congress appears to be moving toward ending the program, replacing it with far cheaper subsidies for crop insurance.

The Senate Agriculture, Nutrition and Forestry Committee last month approved a bill that would save $23 billion over the next decade by ending direct payments and consolidating other programs. The bill would strengthen the subsidized crop insurance program and create a program to compensate farmers for smaller, or "shallow," revenue losses, based on a five-year average, for acres actually planted.

Getting a bill to the president's desk will be a challenge. Most of the bill's spending is on the Supplemental Nutrition Assistance Program, or food stamps, at an annual cost now of about $75 billion. The Republican-led House is looking for greater cuts to this program than the Democratic Senate will accept.

The House also is more sympathetic to Southern rice and peanut farmers who say that shallow loss program hurts them. They want to keep some form of target price subsidy.

The current farm bill expires at the end of September.

But the Senate bill, and presumably the yet-to-be-written House counterpart, "makes clear that the era of direct payments is over," said Democratic Sen. Debbie Stabenow of Michigan, who heads the Senate committee. She said the Senate bill "represents the most significant reform in American agriculture policy in decades."

The White House, which also is pushing for the end of direct payments, says more than 50 percent of the subsidies go to farmers making more than $100,000 in income.

The senate bill would cut subsidies by about 20% -- a good start but far short of what is needed. And there are tweaks that can be made to the insurance subsidy program so that a greater portion of the money goes to smaller farmers.

But the idea of actually eliminating a farm subsidy is good news for the taxpayer.

The subsidies in question are direct payments to farmers whether they grow a crop or not. The Congress appears to be moving toward ending the program, replacing it with far cheaper subsidies for crop insurance.

The Senate Agriculture, Nutrition and Forestry Committee last month approved a bill that would save $23 billion over the next decade by ending direct payments and consolidating other programs. The bill would strengthen the subsidized crop insurance program and create a program to compensate farmers for smaller, or "shallow," revenue losses, based on a five-year average, for acres actually planted.

Getting a bill to the president's desk will be a challenge. Most of the bill's spending is on the Supplemental Nutrition Assistance Program, or food stamps, at an annual cost now of about $75 billion. The Republican-led House is looking for greater cuts to this program than the Democratic Senate will accept.

The House also is more sympathetic to Southern rice and peanut farmers who say that shallow loss program hurts them. They want to keep some form of target price subsidy.

The current farm bill expires at the end of September.

But the Senate bill, and presumably the yet-to-be-written House counterpart, "makes clear that the era of direct payments is over," said Democratic Sen. Debbie Stabenow of Michigan, who heads the Senate committee. She said the Senate bill "represents the most significant reform in American agriculture policy in decades."

The White House, which also is pushing for the end of direct payments, says more than 50 percent of the subsidies go to farmers making more than $100,000 in income.

The senate bill would cut subsidies by about 20% -- a good start but far short of what is needed. And there are tweaks that can be made to the insurance subsidy program so that a greater portion of the money goes to smaller farmers.

But the idea of actually eliminating a farm subsidy is good news for the taxpayer.